Interest Rate Swap

Features and Benefits

Two parties agree to exchange interest payments, based on a nominal principal, over a certain period of time. One party is required to pay a floating interest rate and the other party to pay a fixed interest rate

Suitable for corporate with floating interest rate loans/liabilities

A defensive and conservative hedging strategy to hedge against rising interest rate risk

Simple and straightforward hedging solution

Allows hedger to convert his floating interest rate loan into a synthetic fixed interest rate loan so he could ascertain the interest costs